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Do you need to determine the value of an auto dealership? Here are some industry statistics to consider.

New and used car dealerships are a significant part of the automotive retail and services industry. Classified under the SIC code 5511 and NAICS 441110, there are some 43,600 such establishments in the US alone. The industry sector generates a respectable $343.1B in annual sales employing over 953,000 people. An average auto dealership is a privately owned firm with about $13M in annual sales and a staff of 33.

Auto dealership business valuation by market comparison

Auto dealerships are ubiquitous, many successful companies becoming institutions in their markets. There is a growing trend toward consolidation with smaller independent dealers being bought out by larger companies. As a result, successful privately owned dealerships are frequent acquisition targets.

This is good news if you decide to value an existing auto dealership using the market approach, i.e. by comparison to recent sales of similar companies – there are plenty of business sales to compare against.

Business Valuation Based on Multiples

2 Comments

Dave says:

I need to find value my small used car lot for marital arbitration. Is the inventory valued at liquidation value(wholesale-what it would pull in at a dealer auction?). The only other assets would be some tools and supplies.
Thanks

Harry says:

It depends on the circumstances of your business appraisal. If the intent is to liquidate the business and sell off its assets, then the liquidation premise of value may be appropriate. If, on the other hand, the business will continue running after the valuation date, then the going concern value of its assets is a better fit.

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